Shirley MacLaine comes to the door in slippers and a tracksuit, clutching a fistful of hair and looking, at 78, like an only slightly older version of those famous 1960s roles of hers: gleeful, sharp-eyed, almost confrontationally scatty. We're at her pied-à-terre in Malibu – she lives most of the time on a ranch in New Mexico – a bungalow overlooking the ocean in a secure development popular with celebrities, she says, because of the anonymity; although, when she calls me a cab at the end of the interview, she says blithely down the phone, "Hello, it's Shirley MacLaine", then stands in the driveway, eating a cracker and waving at the driver as he turns in the drive.

This autumn, MacLaine appears opposite Maggie Smith in Downton Abbey, the kind of shark versus bear pairing TV execs only dream about and that, for incongruity, is right up there with the time Liz Taylor appeared in a Miss Marple. MacLaine will play Martha Levinson, Lady Cora's mother, sweeping in from New York to upset the household. Or, as MacLaine puts it as we sit down in her living room, "My character is not crass, but more emotionally democratic than the English. She goes over there to say, 'Rethink your attitudes about tradition!'" She has known Dame Maggie for almost 40 years and what a delight it is, she says, to sit around on set all day, "two senior citizens", gossiping. There was one particular scene, a wedding in a church… hang on, who gets married?!

"Oh, I forget now." (MacLaine has the actor's habit of total amnesia concerning scenes she's not central to.)

"But Maggie and I are there in the scene. And we don't like to get up from our chairs; we just sit. And we must have sat for seven hours in this church. Just talking, talking."

What about?

"Men. Health. Hair." Pause. "One of her friends – I don't want to say who – one very famous friend of hers, has found a new lover."

Oh my God, is it Dench?

It's not Dench. How old is this person?

"A hundred and twenty. And we both wondered how this was possible. We're both divorced, so we talked about that. We talked about if we want a man in our lives again."

And?

"I don't want to share that." She thinks for a moment. "Put it this way: if a good-looking, elderly man had walked in just then... we would have still stayed there talking." MacLaine explodes with dirty laughter.

From right: with Michael Caine in Gambit (1966); in John Goldfarb, Please Come Home (1965); with ­Peter Sellers in Woman Seven Times (1967); with Jack Lemmon in The Apartment (1960). Images: Everett/Rex; Cinetext/Allstar (2); Kobal Collection

One is warned, as an interviewer, about Shirley MacLaine. She is very smart, of course, and inclined to pick up on stupid questions. She talks about celebrity in a way other celebrities do not – the insecurity, the neediness of her peers, the fact you cannot, in most cases, be an A-list actor without being at some level a nutcase. It amuses her to test people. For example, in among the clutter on her coffee table is a joke coffee cup with fake liquid spilling out of it that looks very real. MacLaine once put it on a chair and invited an estate agent who was trying to win business from her to sit down.

"She saw it and sat," says MacLaine. "Didn't say anything."

What, because you're famous and she didn't want to upset the talent?

"Exactly. That's how full of shit she was."

She is the first to mock her own reputation. "People think I'm nuts," is a common MacLaine refrain, which they certainly do, although the fact she acknowledges it softens the impression, so that all that business – the reincarnation, the crystals, the aliens – plays out more like an eccentric hobby than full on insanity.

Above all, one is warned of her waspishness. Early on in our encounter, MacLaine says something mildly interesting about Downton – how the English cast members were too afraid to ask her any questions about Hollywood, although they obviously wanted to – news I receive, as one does in interviews, as if it is the most fascinating thing I have ever heard, putting my hand in front of my mouth in stark amazement. MacLaine drops the story and stares coldly at me.

"Poor dear," she says. "You're suffering.

"No, I was just…"

"Hmm-mm." She is not interested in tolerating a rival performance.

To this end, the thing she values most in life, she says, is honesty, for pragmatic as well as for moral reasons: the only way to be famous and not go mad, says MacLaine, is to hide in plain sight; to undermine the illusion of celebrity before anyone else can. This is both an honest approach and a contrivance to give the impression of honesty. MacLaine has been doing this a very long time.

So anyway, Downton. "They were gobsmacked," she says of the English cast. (MacLaine has picked up some British vernacular. To wit: "They don't understand what a frigging hit they are!")

In one scene, they all sat around the table between takes stealing glances at her. "They wanted to hear about Frank [Sinatra] and they wanted to hear about all my love affairs and Billy Wilder and all of that. But they never asked."

They were shy.

"No," she says firmly. "It's a question of etiquette. It's a question of don't pry. A lot of people have that reaction to me. Until they meet me and then they see, shit, I'll talk about anything."

I would quite like to keep her off Frank Sinatra and Dean Martin and the Rolodex of old lag stories rolled out every time she is written about. Has it ever occurred to her that if she was British, she'd be Dame Shirley by now? MacLaine hoots with laughter. "I was thinking about that! Do I have to be British?"

I think so; Canadian at a pinch. (MacLaine's mother was Canadian). I don't think you can be knighted if you're American.

"No, Elton John is knighted!"

He's British.

"Oh, of course he is. Well, that's too bad."

It came as a great surprise to MacLaine's parents that out of their regular household in Arlington, Virginia – mother a drama teacher, father a professor – they produced two top-flight movie stars. "It's startling to me!" she says. "I mean, where did this come from? I don't have an answer." She can't speak for her brother Warren Beatty (and for periods has not spoken to Warren; she found his womanising distasteful), but thinks the two of them were put in the position of "fulfilling our parents unrealised dreams". She says, "Warren would probably have a different way of saying it. But that's what I feel."

Her father had a degree in philosophy and psychology from Johns Hopkins University, but harboured dreams of "running away to join the circus". Her mother was, well, "my mother was Canadian, so you never knew what she was thinking. Why is she bumping into the furniture and apologising to it?" It was a repressed household, which MacLaine was eager to get away from, and did, early, to train as a dancer.

Thank god for her dance training, she says. Billy Wilder yelling at her on the set of The Apartment was nothing compared with the hell a choreographer puts a young dancer through. Dancers are ambitious but not competitive with others, MacLaine says.

Oh, come off it, I say. Her airy I-don't-compete attitude is not, in a movie star of her longevity, terribly credible, and she laughs and admits her own friends pick her up on it.

"When I said I've never been competitive to Kathy Bates, she hooted with laughter and said are you out of your fucking mind, of course you are!"

Anyway, the point is, says MacLaine, even in her mid-20s - her superstar period - she was not not in a death match with other actors for roles. For a while, the roles came to her; she won an Oscar nomination for her role in The Apartment, opposite Jack Lemmon, and again for her role opposite Sinatra in Some Came Running, as the hopelessly endearing Ginnie Moorehead. This was the decade in which she knocked around with Sinatra and Dean Martin, taking her cabaret act to Vegas, where the front few tables were always taken up by mobsters. (They thought she was cute, MacLaine says, because she was the only person who had the cheek to talk back to them.)

The celebrity world has moved on since then. She is nostalgic for the days when stars knew how to wear their celebrity lightly. "Those guys joked around with their power. And their celebrity. It was all a joke. It was a time before paparazzi. You know when you eat too many sweets and get diabetes? Paparazzi are the diabetes of materialistic culture."

She looks delighted with this.

"That's a good line!"

She was having lunch with Jennifer Aniston and Justin Theroux the other day, she says, and by the time they finished, there were paparazzi outside the restaurant. "I felt so bad. I think the restaurant called them."

She will have a tough time drumming up much sympathy here. From the civilian point of view, someone such as Aniston is assumed to be complicit in her own exploitation.

"I think Diana did. And there are people who get a kick out of manipulating and moulding and sculpting their public image. But I do not think that people like Jennifer and Justin do."

What about someone like Lindsay Lohan? She and MacLaine were slated to do a movie together but it didn't come together. They had a few meetings, though.

"And, you know, her conversation was 90% about her upbringing. Her parents. Now, she's also a master manipulator, and it's not hard to figure out I'm interested in all that stuff, so she was maybe using it. I don't know. I can't advise any of the young ones, because I don't know what their background was, but I would suggest that anyone who wants to be famous more than anything – there's a problem."

MacLaine talks a lot and with frankness in this kind of vein, about the people she has worked with and the damage the system has visited on them. I tell her I was reading her memoir the previous day.

"Which one?" she asks sharply.

My Lucky Stars.

Aside from the chapter on what a nightmare it was working with Debra Winger on Terms Of Endearment (there's an extraordinary scene in the book in which MacLaine recounts how, between takes and to throw her off, Winger jumps on MacLaine and pretends to perform oral sex on her), the book purported to be franker than it actually was. "There is a lot I've never told," she says, "but that'll be for some of my friends after I'm gone."

What you take away from the book is a thorough analysis of the role played by insecurity in her line of work. "You have to be talentedly insecure in order to be a good actress," she says. "And then it's the director's job to make you more miserable and get a good take." MacLaine does not strike me as being terribly insecure. When I ask if she ever wonders if she's worth it, the money and the fame, she says, "That never occurred to me. I said it when I won the Oscar: I deserve this. I really meant it."

Which, paradoxically, isn't the best mentality for someone in her business. She says, "I'm one of the ones who is still around and kind of unabashedly real about everything. But maybe I would have been a lot better actor if I had allowed myself not to understand who I am."

You killed the mystery?

"Maybe."

Like writers who say they won't go into therapy?

"Yes. Norman Mailer and I used to have this argument all the time. He said neurosis is absolutely necessary to being a good writer. And I said, no: I think you're more talented if you know who you are." She thinks for a moment. "But I can't say that knowing who you are makes you less neurotic." The thing she would never do, she says, is "invade my own vulnerable privacy. It's kind of a rip-off when you go to work and the director wants you to cry. I've had a don't-step-across-that-border thing about me. That's why I'm the sane one. I've never experienced these Hollywood stories." (She was never in rehab. When MacLaine was knocking around in the 1960s with all those big drinkers and drug-takers, she would excuse herself from the room. "I'd say, I'll see you when you get done. That could be my dad's influence. His disciplinarian mentality.")

What would she do, then, if a director tried to manipulate her like that?

From all this glib dismissiveness, you would think she had never had a problem in her life. But when MacLaine was in her 40s, she was broke, unemployed, going through a divorce with Steve Parker, the husband with whom she has a grown-up daughter and who, she has said in the past, transferred a great deal of money from her account to his. I can't imagine her zen attitude surviving this intact, and she does allow that during the fallow period – "Those years when the phone doesn't ring and you have no jobs" – she went through a certain amount of existential unhappiness. But really, the only thing that upsets her in life is unfairness, she says. What, such as her husband taking her money?

MacLaine looks weary. "A lot of the money was intended for good investments. And with the divorce, I said to his lawyer, he can have anything he wants. And he took nothing: $100,000. And $10,000 a year."

But he'd taken your money already!

"Yes. But by the way, I was leading a very open life with many men, so he took some of that money and gave it to the woman he was mostly involved with."

It was your money!

"I know. But without him I wouldn't have been protected enough to be sane. He was my guardian, my manager, my companion, my helpmate. He never said anything about all my relationships. It was an interesting open marriage."

She has never remarried. Her daughter, Sachiko, grew up mainly with her ex-husband, then living in Japan, which was probably a good thing, MacLaine says. It kept her out of the Hollywood rat race. Although, rather brutally, she says, "I think she's always secretly wanted to be in showbusiness. I don't know what that's like. I don't know what it's like not to have what I want." MacLaine shrugs. "But then, I don't want very much."

Actually there was something she wanted recently and didn't get, which was to be cast in the movie version of the hit Broadway play, August: Osage County. MacLaine campaigned for it, but it went to Meryl Streep. "You get the routine, 'Well, we're not sure we can finance it...' They couldn't have financed it with me! They can with Meryl."

As Martha Levinson, Lady Cora’s mother, in the new series of Downton Abbey. Photograph: Nick Briggs/ITV

Which brings us back to the subject of Downton – despite losing out to Streep in Osage County, the TV show has boosted MacLaine's bankability. She has four potential movies in the works at the moment. She would like to do another series, if she could figure out a way to take the dog. We talk about class, again, and what happens when celebrities marry civilians, like Lady Sybil running off with the chauffeur.

"Which one's she again?"

The youngest one, with brown hair – don't worry about it.

"One of my best love affairs was with my driver," MacLaine says.

Really?

"He was Canadian. We had the best time."

Was your celebrity in the room with you?

"Sure. It was hard on him." She sighs. "They want to be in it. They want to be you. There are two businesses in the world, Emma, two businesses: showbusiness and everybody else's business."

If everyone wants to be famous, when you're famous, what do you want to be?

"First off, come and fucking stay on a movie set for a couple of days and see whether you like it. The question is why this needs to be acknowledged. There's a wrongness to it. Everybody wants to be famous, and it's because there's a spiritual vacancy. They try to find it with money, sex, religion. How are they going to fill that vacancy? And they try to do it with dreams of fame."

The Scientologists have tried to recruit MacLaine many times, "because they know I believe in reincarnation". She bats them away. "I'm not sure what they really believe. Much of it is secret."

Anyway, so why didn't it work out with the driver?

"He was too intimidated by my fame. I don't know how any guy could have put up with me, really. Honestly." This in spite of the fact she says she is very undemanding. Every assistant she has had, MacLaine says, has told her she is the most low-maintenance person they have worked with.

So what was there to put up with?

"Where?"

In your relationships? What drives them away?

"Oh, that. That I don't need 'em."

It's a couple of years off yet, but for her 80th birthday MacLaine would like to fly a bunch of friends to New Mexico for dinner. This will separate the wheat from the chaff, she says. When you live out there, you really find out who your friends are. At a recent American Film Institute event in her honour, she sat next to Meryl Streep, who she considers a great friend, ("She really looked after me. She would turn around to people who were bothering me and say, 'She's eating, do you mind?'"), and her other great friend, Julia Roberts.

She gives the impression of knowing everyone. Tom Cruise? "He's a darling guy. I think he's embraced, for him, other realities that work." Bill Clinton? "Sure. He reminded me of a long walk we took on the beach when I was campaigning for McGovern." She smiles. "He has complete command of being loved."

She is loyal to her friends, she says; her agent is 80 years old and has been with her since her 20s. He knows where "all the money" for the independent movies is, which is useful at her age, since she hasn't much hope of a blockbuster. She lives a relatively simple life, going to bed at 2am and up at 9am. "I'm on Vegas time. I've been on Vegas time most of my life."

We go into the kitchen and MacLaine opens a jar of peanut butter and starts spreading it on crackers. She butters a cracker for herself, and one for me; one for her, one for me. Then two for her and one for me. She will not relinquish the jar.

She describes a scene in Downton, which she came up with herself and which Julian Fellowes allowed her to keep in. It is her favourite scene in the series; MacLaine's character decides to serenade Maggie's with a rendition of Let Me Call You Sweetheart. When the scene was explained to Maggie, the actress said to her American co-star, "You know what I'm going to do, dear, I'm going to fall off the chair when you start singing.'" MacLaine rolls her eyes. "I said OK, whatever. Then Maggie said, 'No, I think I'll fall asleep.' But actually, what she did when I started singing was to go all cuddly and coy. And then I kiss her hand." Between these two old war horses, it was, says MacLaine, the sweetest moment in the world.